Relief for pensioners as Parliament passes Pensions Amendment Bill, 2022

The National Assembly has successfully passed the Pensions (Amendment) Bill, National Assembly Bill No. 44 of 2022.

Sponsored by Kimilili MP Didmus Barasa (Kimilili), the bill amends the Pensions Act to establish a clear timeline for pension disbursement and expedite payment.

Upon being assented to by President William Ruto, government ministries and departments will be required to submit necessary documents to the Pensions Department within 30 days of an employee's retirement.

Subsequently, the Pensions Department will have a 60-day window to process pension payments for retirees. Pensioners will then receive their pension within three months of applying.

The Bill was published on October 28, 2022, read for the first time on February 15, 2023, and committed to the Departmental Committee on Finance and National Planning for review and reporting to the House pursuant to Standing Order 127. 

Kuria Kimani, the Chairperson of the Departmental Committee on Finance and National Planning, presented the bill on behalf of the department. It was later subjected to public participation as required by the law to ensure transparency and inclusivity in the legislative process.

“The principle object of the Bill is to amend the Pensions Act, Cap. 189 to provide a timeline within which pensions shall be payable to officers,” the Bill states.

“The Bill seeks to remedy the delays experienced in payment of pensions to pensioners upon maturity of pension funds.”

Didmus Barasa, a Kenyan Member of Parliament, works in his office in Nairobi, Kenya, on July 9, 2024. (Photo: REUTERS)

Prior to the changes, pensioners were frustrated by the longer waiting periods as there was no specific timeline for the release of the funds.

The country has faced a backlog of pension payments for years, a situation worsened by the government's decision to raise the retirement age from 55 to 60 in 2009.

According to the government, raising the retirement age was aimed at creating enough time to clear the backlog.

Last year, in June 2023, the Pensions Department at the National Treasury announced plans to process 85,400 claims over three years, with Treasury expected to release nearly Sh685 billion in pension benefits.

Treasury was further projected to release Sh189 billion for the financial year 2023/24 and Sh207 billion for the new financial year, 2024/25.

30,155 workers were projected to retire by June 2024, 28,745 in 2025, and 26,500 in 2026.

This year, more pensioners are still waiting for funds with documents by the Parliamentary Budget Office (PBO) indicating that unremitted pension dues stood at Sh47.6 billion while PAYE was Sh25.3 billion as of February 2024.

State agencies were said to have failed to remit over Sh72.96 billion in pension and pay-as-you-earn (PAYE) deductions.